The single currency closed down 0.24% to 1.1286 on Monday, December 6. Price action climbed to 1.1310 during the European trading session. The demand for risk assets was partly triggered by media reports that the new Omicron strain is less dangerous than the Delta variant. The economic calendar was a blank slate, so the EURUSD pair traded in a limited range.
Today’s macro agenda (GMT+3)
By the time of writing, major currencies were trading in positive territory. The Japanese yen was stuck in the red, while the euro was trading at 1.1294. The price action pattern has been within the November 30 range for the fifth day in a row. The news flow looks thin this week. CPI reports will be released in Germany and the US on Friday, potentially leading to heightened market volatility.
The price range has narrowed to 1.1273 and 1.1305, with price action being hammered into a corner. The market looks set for some sharp fluctuations. Given today’s heightened demand for risk-sensitive assets, a breakout at 1.1305 is expected, followed by a leg up to 1.1345 (67-degree angle of the Gann fan). That said, gains are capped by some cross pairs in which the euro is sold. If buyers fail to gain a foothold above 1.1310 before the North American session opens, the sideways trend will continue. However, under this scenario, the odds of price action dropping under 1.1265 increase dramatically.